Linguistic communication requires the constant assessment of others' understanding: Speakers evaluate their listeners' understanding in order to facilitate communication, and third parties (i.e., overhearers, readers) attempt to take the perspective of listeners (and protagonists) in order to make sense of a conversation. This research focuses on the constraints that the cognitive system imposes on such perspective taking by contrasting two alternative models. The studies investigate the notion that speakers and third parties cannot discount their own privileged information when they assess the understanding of addressees even when they are fully aware that the particular information is unknown to the addressees. Because privileged information makes utterances seem less ambiguous than they really are, speakers tend to think that their intent is clearly conveyed. Consequently, they may not provide sufficient cues to disambiguate their utterances., This project proposes that this "illusory transparency" may sometimes be a systematic reason for, misunderstanding. These studies utilize a variety of experimental methods and paradigms: subjective scale ratings, categorical decisions, reaction time, cognitive load, syntactic priming, sentence production and the referential- communication task. In addition to theoretical contributions, this research promises to be of practical importance. For example, we may be able to better understand miscommunication in health-care settings: health-care providers attempting to inform, advice or instruct clients; communication between patients and therapists in counselling sessions and so on. One reason for miscommunication may be the discrepancy between the knowledge that clients and health-care providers possess. These studies suggest an additional, simpler reason for such miscommunication: Like other speakers, health care providers and recipients may overestimate the effectiveness of their communicative act by systematically taking their intentions as more transparent than warranted. By contributing to the understanding of the roots of misunderstanding, this research promises to facilitate the development of methods to improve communication.